Investing in lithium mines may shield electric-vehicle makers from rising prices – by Anthony Barich (SP Global – November 2022)

It is time for electric-vehicle makers to go beyond lithium off-take agreements and get more involved in mining and processing, industry observers said.

Recent price increases for certain metals showed their vulnerability to supply chain disruptions, which threaten to boost the cost of clean energy technologies and slow their deployment, the International Energy Agency, or IEA, said in its World Energy Outlook 2022, published Oct. 27.

“With rapid demand growth, [electric vehicle] makers are likely to strengthen their efforts to secure stable supplies through various ways, including not just long-term off-take agreements, but also equity investments, joint ventures and direct investments in mines and processing facilities,” IEA Energy Analyst Tae-Yoon Kim told S&P Global Commodity Insights.

The challenge is particularly acute for lithium. Lithium prices have risen to even greater record highs, proving resilient against economic pessimism and China’s COVID-19 lockdowns that have tempered other battery metals’ prices. While the IEA sees significantly less lithium will be needed for the world to be carbon neutral by 2050 than thought just a year ago, it also suggested EV-makers may need to invest in miners neglected by some jurisdictions that have prioritized battery cell production over building out raw material supply.

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